The Week India – July 21, 2019

JULY 21, 2019 • THE WEEK 59

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SURJIT S. BHALLA, economic
adviser to the fifteenth Finance
Commission and a member of the
advisory board of the New York-
based Observatory Group, deliv-
ered the 20th Malayala Manorama
Budget Lecture in Kochi on July 8.
Excerpts from the speech:

Agriculture
Any country which wants economic
growth should give utmost impor-
tance to the growth of the agriculture
sector. Unfortunately, the sector has
been ignored by reforms. The gov-
ernment wants to double farmers’
income by 2022. That means 10 per
cent real growth in the income a year,
which is not easy. We should stop
mixing production and pricing, and
allow production to be maximised.
Only middlemen and politicians gain
from the pricing mechanism.

Corporate tax
The finance minister brought down
corporate tax for 99.3 per cent com-
panies. She should have reduced

it for 100 per cent. Indian industry

faces the highest interest rate and the

highest effective tax rate in the world.

Income tax

Squeezing the ultra rich by way of

taxing them more is not a smart

move. Is the government taxing the

rich for the poor? The wealth that

needs to be redistributed to the

poor has to come from the rich, and

wealth has to be created before it is

redistributed.

Economic growth

The target of making India a $5 trillion

economy by 2024 is a conservative

one by any means. Even if India grows

below 10 per cent, it is achievable

considering the rupee’s movement

against the dollar.

The big mandate

This budget was an important one be-

cause of the big mandate the BJP got.

Expectations were high as everybody

considered it an opportunity to take

bold measures. Though the budget

was good on vision it did not fulfil the

expectations.

The future of budget

The budget cannot change indirect

taxes because the GST Council de-

cides those. Once India has a direct

tax code, there will not be any oppor-

tunity for changing that in the budget,

either. So the scope of budget will be

limited to tinkering with duties.

Agriculture needs reforms

JOSEKUTTY PANACKAL